WTO “Rules”:

1. WTO “Rules”: Safeguards, Anti-dumping and Subsidies and Countervailing Measures, State Trading Enterprises Russian Federation, September 2012 Susan Hainsworth, ITTC,WTO

2. WTO “RULES”: SCOPE and DISCIPLINES • Scope: goods -- including agricultural goods, in principle • Disciplines: • multilateral subsidies disciplines (SCM) • unilateral trade remedy disciplines (AD/CVD/SCM) • State-trading enterprises

3. (after investigation) UNILATERAL TRADE REMEDIES Anti-dumping Countervailing (anti-subsidy) Safeguards

4. UNILATERAL TRADE REMEDIES: HOW, WHO, WHAT…? HOW? pursuant to investigation establishing increased/dumped/subsidized imports, injury, causation WHO? by IA of importing country WHAT? corrective (AD/CVD)/ emergency(SG) measure WHERE? at border of importing country WHY? to « protect »temporarily WHOM? domestic industry producing the « like » product (AD/CVD/SG)/ « directly competitive » product (SG)

5. Russian Federation:Customs Union (“CU”) with Belarus and Kazakhstan • aim to create a common trade remedies system, with a single competent authority for the CU: “Department for Internal Market Defence of the Eurasian Economic Commission” • will impose measures on behalf of the CU as a whole, trade remedies among CU parties precluded. • currently in a "transition period"

6. UNILATERAL: SAFEGUARDS • Unilateral trade remedy measure to counteract increased imports • WTO Safeguards Committee • different from AD/CVD: • no “unfair” trade practice • injury at a higher level (serious injury vs material injury) • to a large degree, applied on a MFN basis • compensation to affected trading partners

7. SAFEGUARDS: SUBSTANTIVE CRITERIA Legal basis: Article XIX GATT 1994; Agreement on Safeguards • As a result of unforeseen developments and the effect of a Member’s obligations under GATT 1994 • Imports in such increased quantities - absolute or relative to domestic production • As to cause or threaten to cause serious injury • To domestic industry producing like or directly competitive products

8. SAFEGUARDS: SERIOUS INJURYTHREAT OF SERIOUS INJURY • Definition: “Significant overall impairment in the position of the domestic industry” (Art. 4.1(a)) • “Evaluation of all relevant factors of an objective and quantifiable nature having a bearing on the state of the domestic industry” (Art. 4.2(a)) THREAT: • Must be clearly imminent…The anticipated serious injury must be on the very verge of occurring. (AB, Lamb, para. 125) • Based on facts and not allegation conjecture or remote possibility

9. SAFEGUARDS: CAUSATION • NON-ATTRIBUTION: Identify injury caused by factors other than increased imports, and demonstrate that such injury has not been attributed to increased imports (Art.4.2(b)) • IA must give reasoned and adequate explanation (AB, Line Pipe, para. 217) • "Genuine and substantial relationship of cause and effect between increased imports and serious injury” (AB, Wheat Gluten, para. 69)

10. SAFEGUARDS: PROCEDURES • Investigations conducted by authorities of importing Member • According to strict rules - Transparency and due process • Treatment of confidential information

11. SAFEGUARDS: FORM OF MEASURE • MFN, in principle • Form not specified in Agreement • Must choose most appropriate Tariff surcharge Quotas

12. SAFEGUARDS: S & D Volume importedfrom DC (SG) Cumulative

13. 2 yrs 2 2 x +fast 2 x + SAFEGUARDS: S & D (users) Extension Re- application

14. Safeguards: RussianFederation July and September 2012 • Department for Internal Market Defence of the Eurasian Economic Commission initiated two safeguard investigations: • Tableware and kitchenware of porcelain • Combine harvesters

15. Multilateral subsidy disciplines: what is a subsidy?what is specifity?Categories of subsidies?

16. $ubsidization is done by governments … • So, there are also multilateral WTO disciplines on subsidies

17. Whatis a $ubsidy? financial contribution by a government/public body conferring a benefit

18. Benefit? Ex: loan A BANK 10% Commercial interest rate 8% GOV’T 6% Gov’t rate Benefit = 2% Cost to gov’t = 0

19. Benefit ? – ex. Guarantee BANK A SITUATION A (no guarantee) 10% 10 million A SITUATION B (with gov’t guarantee) BANK 8% Guarantee 10 million GOV’T Benefit = 2% Cost to gov’t = 0 - 10 million (if default)

20. Subsidy: Specificity Principle • Subsidies create disortions • de jure or de facto • By company • By sector • By region • Prohibited subsidies

21. CATEGORIES OF $UBSIDIES • Subsidies : • Prohibited • « Actionable » • « Non-actionable » expired!!!

22. PROHIBITED SUBSIDIES • Contingent upon (in law or in fact): • Export performance • Use of domestic over importedgoods

23. 1. LDCs 2. Annex VII 3. Art. 27.4 Members EXPORT SUBSIDY: S & D TREATMENT OTHER MEMBERS (including RF)

24. S&D transition periods (5 & 8 yrs.) expired LOCAL CONTENT SUBSIDY: NO MORE S & D Violation of national treatment principle

25. Subsidy ACTIONABLE SUBSIDIES Adverse effects: • serious prejudice • injury • nullification of tariff concessions Causal link

26. UNILATERAL COUNTERVAILING DUTY (CVD) “anti-subsidy” trade remedy measure: SUBSTANCE: specific subsidy,injury (domestic industry/like product), causation PROCEDURE: investigation MEASURE: “tariff surcharge” at border of importing Member TRANSPARENCY: notifications WTO Committee on Subsidies and Countervailing Measures

27. Subsidy RussianFederation: Subsidies WPR: some RF commitments • any subsidy programmes within RF territory will be administered in conformity with the ASCM • "except as otherwise provided", RF to eliminate or modify all programmes within its territory falling within the scope of Article 3 (prohibited subsidies) • energy pricing • export credits • Special Economic Zones, etc.

28. UNILATERAL ANTI-DUMPING DUTY (AD) “anti-dumping” trade remedy measure: SUBSTANCE: dumping, injury (domestic industry/like product), causation PROCEDURE: investigation MEASURE: “tariff surcharge” at border of importing Member TRANSPARENCY: notifications WTO Anti-dumping Committee

29. Adjustments WHAT IS DUMPING?... Normal value Export price Fair comparison

30. Russian Federation: Anti-dumping • September 2012: • Investigations against: China (4), Chinese Taipei (4), Hong Kong, China (4), Macao, China (4), S. Korea (1), Ukraine (4), Brazil (1), S. Africa (1)

31. Notifications • WHO? • ALL WTO Members, • without exception • Internalprocedures • Competentauthorities • WHAT? • Actions during investigations • 2. Trade remedymeasures • 3. Laws, regulations and procedures • 4. Subsidies

32. Notifications • WHERE? • To appropriate WTO Committee SG/AD/SCM (via CRN) for review by Members • WHY? • Transparency • Predictability

33. Rules Notifications: RussianFederation • -notification of laws and regulations under ADA (Art. 18.5), SCM (Art. 32.6), SG (Art. 12.6 • -initiation of safeguards investigations • -semi-annual report of anti-dumping actions (January-June 2012)

34. State Trading Enterprises • Article XVII of the GATT 1994 and WTO Understanding on the Interpretation of Article XVII: “commercial considerations” main obligations: • (1) non-discrimination, commonly referred to as "most favoured nation" or "MFN" treatment; • (2) no quantitative restrictions; • (3) preservation of the value of tariff concessions; and • (4) transparency

35. State Trading Enterprises Transparency: Members are to notify their “state trading enterprises” to the WTO annually, i.e.: "Governmental and non-governmental enterprises, including marketing boards, which have been granted exclusive or special rights or privileges, including statutory or constitutional powers, in the exercise of which they influence through their purchases or sales the level or direction of imports or exports."

36. State Trading Enterprises: Russian Federation • WPR: some RF commitments: • STEs operating in commercial sphere to make purchases and sales in international trade in a manner consistent with applicable WTO provisions; in accordance with commercial considerations • Notification of enterprises falling within the scope of the Understanding

37. Thank you!